HomeMy WebLinkAbout021306 ORD - 12/17/1991AN ORDINANCE
AMENDING THE CODE OF ORDINANCES, CHAPTER 35, OIL AND GAS
WELLS, BY AMENDING SECTIONS 35-3, 35-16, 35-34, 35-35, 35-
60, 35-80, 35-105, 35-107, 35-130, AND 35-133.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS
CHRISTI, TEXAS:
SECTION 1. That the Code of Ordinances, Chapter 35,
Sections 35-3, 35-16, 35-34, 35-35, 35-60, 35-80, 35-105, 35-107, 35-
130, and 35-133 are hereby amended by deleting them in their entirety
and substituting the following therefor:
Sec. 35-3. Administrative enforcement and supervision.
Administrative enforcement of the terms of this Chapter shall be
by the oil and gas well division of the city. It shall be the duty of
the superintendent to enforce the provisions of this chapter and to
that end he is hereby vested with police authority.
Sec. 35-16. "City petroleum superintendent."
The term "city petroleum superintendent" or "superintendent"
means the head of the oil and gas well division of the city.
Sec. 35-34. Oil and Gas Well Division; established.
There is hereby continued, the oil and gas well division, to
exist until abolished by the council.
Sec. 35-35. Department head -Appointment; qualifications; disclosure
of interest.
The head of the oil and gas well division shall be the petroleum
superintendent appointed by the city manager. The city petroleum
superintendent (also referred to herein as superintendent), shall be a
technically qualified person with respect to the type of oil and gas
activity prevalent in the area covered by this chapter. Before
appointment, any person being considered for the post of
superintendent shall make a full disclosure to the city manager and
the council of any employment, stock ownership or other pecuniary or
business relationship with any lessee, and during his term of office
the superintendent shall make the same disclosure as to any changes in
such matters.
Sec. 35-60. Drilling blocks.
In order that the purpose and intent of this chapter, as stated
in Article I, shall be carried out and future drilling for oil and gas
within the city may proceed in an orderly manner, and for convenience
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021306
and clarity in identifying the location of approved or proposed
drilling locations, the land area of the city to which this article
applies (with the exceptions noted in section 35-62) has been divided
into drilling blocks, each containing approximately forty (40) acres.
Each block is shown and identified on a map marked Exhibit A, and on
file in the oil and gas well division office. The exact description
of any such drilling block not already approved by ordinance prior to
the adoption of this chapter shall be determined in the manner
provided in section 35-61 hereof.
All mineral interests in each drilling block shall be unitized as
herein provided with the exceptions noted in section 35-62. No
application to drill on any drilling block where all or part is
required to be unitized will be approved unless the applicant shows
that he owns or controls by voluntary agreement more than fifty (50)
percent of the total operating rights in the drilling block, or that
portion of the block left after deducting exempt acreage, to be
unitized. No more than one completion shall be made in any reservoir
on any drilling block until special field rules have been adopted by
the railroad commission for the reservoir. The final well density
within each drilling block will be no greater than that prescribed by
the railroad commission in special field rules which may be adopted
for the field.
The city council may, from time to time, amend the boundaries of
the drilling blocks referred to in this section, after a
recommendation to that effect from the oil and gas well division.
Prior to a recommendation for amendment of the drilling block
boundaries, the oil and gas well division shall cause to be published
on the same day for two (2) consecutive weeks a notice of the drilling
blocks proposed to be changed. The applicant seeking the change in
the drilling block boundaries shall pay for notification in the
official city newspaper. The proposed changes shall also be kept on
record in the office of the oil and gas well division for a period of
seven (7) days after the second notice hereinabove referred to. If no
objections have been received, or if after examination of any
objections received, the petroleum superintendent or his
representative recommends a change in the drilling block or blocks,
then the recommendation of the petroleum superintendent shall be
forwarded to the office of the city manager for further action. If
objections are received, then the city secretary shall arrange for a
public hearing on the question of alteration of the drilling block
boundaries before the city council.
Section 35-80. Insurance and Bonds.
(a) The holder of any well permit issued hereunder shall obtain
and maintain in force insurance required as determined in accordance
with the provisions of ordinance no. 19277, as amended.
(b) The holder of any permit to drill and/or operate a well
issued hereunder shall be responsible for all environmental pollution
AG5000.003.kp 2
caused by its well(s). The permittee's responsibility shall include,
but not be limited to, paying for or doing all clean up and
remediation of environmental pollution, paying all fines and penalties
levied by any governmental agency, and any other actions required by
governmental agencies.
(c) The holder of any permit to drill and/or operate a well
issued hereunder shall post a corporate surety bond, executed by the
permittee as principal and by a corporate surety acceptable to the
city, as obligee, and conditioned that the principal named in the bond
shall faithfully comply with all of the provisions of this chapter and
of the permit until the permit shall have been released by the
principal and the release shall have been approved by the city as
provided herein. Such bond shall secure the city against all costs,
charges and expenses incurred by it by reason of the failure of the
principal to fully comply with the provisions of the permit and of
this chapter. The bond for any well permit with a surface location in
a bay area that is accessible only via marine vessel shall be fifty
thousand dollars ($50,000.00) per permit, the bond for any number of
well permits with surface locations on land and accessible by a land
vehicle shall be twenty thousand dollars ($20,000.00), and the bond
for any well permit with a surface location in the Gulf of Mexico
shall be two hundred thousand dollars ($200,000.00). No permit holder
shall be required to post more than a two hundred thousand dollar
($200,000.00) bond for any number of well permits required by this
chapter. A bond issued under this provision must be valid for six (6)
months or more and require as sole documentation for payment a
statement in writing from the petroleum superintendent setting forth
the circumstances giving rise to the call on the bond, or a statement
of the failure to furnish proof of renewal or replacement of the bond,
no less than thirty (30) days prior to the expiry of the then current
bond. Such bond must be renewed upon expiration and proof of such
renewal must be received by the city's petroleum superintendent or
successor official "petroleum superintendent" at least thirty (30)
days prior to expiration. If no renewal is received, or cash in lieu
thereof, the city may, after ten (10) days prior written notice mailed
to the permittee at the address listed on the permit, call the bond
for failure to timely renew. If the bond is called for failure to
timely renew, the money will be held in an account as if cash had been
posted in lieu of a bond. The city shall not be liable for any
interest on any bond so called.
(d) In lieu of the above described bond, a permittee may be
allowed to submit an irrevocable letter of credit naming the city as
beneficiary, in face value equal to that of the bond as described
above. An irrevocable letter of credit under this provision must be
issued by a financial institution with offices located within the
State of Texas, be valid for six (6) months or more, and require as
sole documentation for payment a statement in writing from the
petroleum superintendent setting forth the circumstances giving rise
to the draft and accompanied by a properly drawn draft in an amount
not to exceed the face value of the letter of credit, or a statement
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of the failure to furnish proof of renewal or replacement of the
letter of credit, no less than thirty (30) days prior to expiry of the
then current letter of credit. Such letter of credit must be renewed
upon expiration and proof of such renewal must be received by the
petroleum superintendent at least thirty (30) days prior to
expiration. If no renewal is received, or cash in lieu thereof, the
city may, after ten (10) days prior written notice mailed to the
permittee at the address listed on the permit, call the letter of
credit for failure to timely renew. If the letter of credit is called
for failure to timely renew, the money will be held in an account as
if cash had been posted in lieu of a letter of credit. The city shall
not be liable for interest on any letter of credit so called.
(e) In lieu of the above-described bond, a permittee may be
allowed to submit a certificate of deposit, in face value equal to
that of the bond as described above. A certificate of deposit under
this provision must be made out jointly to the customer and the city,
endorsed by the customer and physically held by the city, issued by a
financial institution with offices located within the State of Texas,
be valid for six (6) months or more, and require as sole documentation
for payment a statement in writing from the petroleum superintendent
setting forth the circumstances giving rise to the draft, or a
statement of the failure to furnish proof of renewal or replacement of
the certificate of deposit, no less than thirty (30) days prior to
expiry of the then current certificate of deposit. Such certificate
of deposit must be renewed on expiration and proof of such renewal
must be received by the petroleum superintendent at least thirty (30)
days prior to expiration. If no renewal is received or cash in lieu
thereof, the city may, after ten (10) days prior written notice mailed
to the permittee at the address on the permit, call the certificate of
deposit for failure to timely renew. If the certificate of deposit is
called for failure to timely renew, the money will be held in an
account as if cash had been posted in lieu of a certificate of
deposit. The city shall not be liable for interest on any certificate
of deposit so called.
(f) In lieu of bond and insurance for permits, a permittee may
be allowed to post an indemnity agreement, in a form acceptable to
city, with the city conditioned in the same manner as bond and
insurance required hereunder if such permittee files a balance sheet
and financial statement certified by a recognized firm of certified
public accountants reflecting the net worth of permittee to be in
excess of twenty million dollars ($20,000,000.00).
(g) The city manager reserves the right to adjust the limits and
types of coverages required and will provide sixty (60) days notice of
intent to change coverages or limits to the permit holders. Permittee
agrees to adjust its insurance policy(ies) as directed at its next
renewal date or within one (1) year from notice of the adjustment
whichever occurs sooner.
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Sec. 35-105. Gas well testing and flaring.
The oil and gas well division must be notified a minimum of one
hour prior to the commencement of any gas well back pressure test
program wherein gas is released to the atmosphere either in a natural
state or by flaring. The oil and gas well division and fire
department shall have the authority to specify the hours during which
testing or flaring may be performed and impose any restrictions deemed
necessary to protect the public health, welfare and environment during
testing or flaring.
Sec. 35-107. Subsurface safety valves.
All wells with surface locations on state tracts and all wells
with a surface shut-in pressure in excess of three thousand (3,000)
psi shall be equipped with a subsurface safety valve. On wells with
surface locations in the Gulf of Mexico, this valve shall be inspected
or tested every two (2) years and a report of same filed with the oil
and gas well division office. On all other wells, this valve shall be
pulled and inspected annually and written confirmation of the
inspection shall be filed with the oil and gas well division office.
In the event that the Railroad Commission of Texas waives the
requirement for a subsurface safety valve in a well on state owned
tracts, then, upon written request for waiver from the operator for
the same well, the petroleum superintendent shall evaluate the flow
and pressure in that well and using appropriate engineering guidelines
to prevent pollution, he may waive the requirement for a subsurface
safety valve.
Sec. 35-130. Wells to be abandoned.
All wells within the city which are not producing oil or gas on a
regular basis will, with the exceptions noted below, be plugged and
abandoned.
Exceptions:
(a) Wells located on state tracts wherein the permittee holds a
valid lease on minerals penetrated by such wells.
(b) Wells in use as water supply wells.
(c) Wells in use as salt water or waste disposal wells which are
operating under a valid permit from the governmental agency
having authority, including but not limited to the permit
required in this chapter.
(d) Wells used as injection or observation wells in secondary
recovery, pressure maintenance or other improved recovery
operations where such operations are conducted under a valid
permit from the railroad commission.
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(g)
Wells capable of producing oil or gas on a regular basis
which are shut-in due to lack of market or because of
transfer of allowable permitted by the railroad commission.
Any well on which drilling, reworking, recompletion, or well
servicing operations are in progress and continued with no
cessation of more than ninety (90) consecutive days.
Land wells where, within ninety (90) days of the effective
date, or within ninety (90) days of the well's ceasing to
produce oil or gas on a regular basis, the owner thereof
files with the superintendent an application for exception
which includes the following:
(1) A surety bond in the amount of four thousand five
hundred dollars ($4,500.00) with good and sufficient
corporate surety payable to the city, providing that
the principal will plug said well in accordance with
the provisions of this chapter. In lieu of said bond,
cash in the amount of four thousand five hundred
dollars ($4,500.00) or a certificate of deposit
endorsed to and held by the City in the amount of four
thousand five hundred dollars ($4,500.00) may be
deposited with the city on the same conditions; or, in
the alternative, a letter of credit naming the city as
beneficiary in the face value of four thousand five
hundred dollars ($4,500.00), against which drafts may
be drawn pursuant to the same conditions upon which the
bond would be predicated, based upon a statement in
writing by the petroleum superintendent setting forth
the circumstances giving rise to the draft and
accompanied by a properly drawn draft in an amount not
to exceed the face value of the letter of credit or
certificate of deposit. A bond, letter of credit, or
certificate of deposit required herein shall meet all
requirements set out in Section 35-80, except the
amount which is set out herein. A bond conditioned as
provided in section 35-80 shall also be filed unless
such bond so conditioned is already on file and in
effect. Operators that have indemnity agreements or
two hundred thousand dollars ($200,000.00) bonds posted
under section 35-80 are not required to post in lieu of
plugging bonds. The plugging bond shall be released
when the well is plugged and abandoned, or when the
superintendent has been satisfied that the well is
again producing oil or gas on a regular basis, or when
it meets one of the conditions of exemption listed in
paragraphs (d), (e) and (f) of this section.
Acceptance, or continuation beyond an initial three-
year period, of "in lieu of plugging" bonds shall be
permitted only for those wells which have not been
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plugged and abandoned where the operator and principal
on the bond still holds a valid lease on the minerals
penetrated by such well. The operator, when posting a
bond, or continuing a bond beyond the initial three-
year period, shall provide the oil and gas well
division with evidence that he does in fact own or
control minerals penetrated by the well. In cases
where the mineral lease has expired and wells have not
been plugged, then the operator and the surety will be
notified at least three (3) months prior to calling on
the bond so that sufficient time will be permitted for
the operator or surety to adequately plug and abandon
the well or the city will in fact plug and abandon the
well and charge the cost to the surety.
Sec. 35-133. Cutting off casing.
When a well with a surface location on a state tract is plugged,
then the casing shall be cut off and removed from the depth prescribed
by the corps of engineers. When a well with a surface location that
is not on a state tract is plugged, then the casing shall be cut off a
minimum of five (5) feet below the surface of the ground and a one-
half -inch steel plate welded over the top. A two-inch collar shall
then be welded to the plate. A two-inch galvanized pipe shall be
screwed into this collar so as to extend upwards five (5) feet above
the surface. The oil and gas well division will provide a certificate
to be attached to the two-inch riser and it shall be unlawful to
remove such riser unless a permit to remove same is approved by the
oil and gas well division.
SECTION 2. If for any reason any section, paragraph,
subdivision, clause, phrase, word or provision of this ordinance shall
be held invalid or unconstitutional by final judgment of a court of
competent jurisdiction, it shall not affect any other section,
paragraph, subdivision, clause, phrase, word or provision of this
ordinance for it is the definite intent of this City Council that
every section, paragraph, subdivision, clause, phrase, word or
provision hereof be given full force and effect for its purpose.
SECTION 3. Publication shall be made one time in the
official publication of the City of Corpus Christi by publishing the
caption stating in substance the purpose of the ordinance, this
ordinance to become effective upon such publication.
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That the foregoing ordinance was read for the first time and passed to its second reading
the day of , 19 , by the following vote:
Mary Rhodes Edward A. Martin
Cezar Galindo Joe McComb
Leo Guerrero Dr. David McNichols
Betty Jean Longoria Clif Moss
Mary Pat Slavik
That the foregoing ordinance was read for the second time and passed to its third reading on
this the day of , 19 , by the following vote:
Mary Rhodes Edward A. Martin
Cezar Galindo Joe McComb
Leo Guerrero Dr. David McNichols
Betty Jean Longoria Clif Moss
Mary Pat Slavik
RPI NDeo :
That the foregoing ordinance was read for the third time and passed finally on this the
day of , 19 , by the following vote:
Mary Rhodes Edward A. Martin
Cezar Galindo Joe McComb
Leo Guerrero Dr. David McNichols
Betty Jean Longoria Clif Moss
Mary Pat Slavik
PASSED AND APPROVED, this the day of , 19
Al EST:
City Secretary MAYOR
THE CITY OF CORPUS CHRISTI
APPROVED: 5 DAY OF 1>y(wfl Joe , 191/ :
JAMES R. BRAY, JR., CITY ATTORNEY
By 01 lacy. t11 0 Pau., to -i , Assistant City Attorney
044
That th(e foregoing o
the 9. { day of
inance1 was read for the first time and passed to its second reading c
Lc/L.." , 1941 / , by the following vote:
Mary Rhodes
Cezar Galindo
Leo Guerrero
Betty Jean Longoria
Edward A. Martin
Joe McComb
Dr. David McNichols
Clif Moss
Mary Pat Slavik
That the foregoing ordinance was read for the second time and passed to its third reading on rn
this the S day of / `e f t l l QA_ , 19 C? ! , by the following vote:
Mary Rhodes
Cezar Galindo
Leo Guerrero
Betty Jean Longoria
� 1 .
(LLL
ittc
Lt � _
Edward A. Martin
Joe McComb
Dr. David McNichols
Clif Moss
Mary Pat Slavik
al
That thRforegoing ordinance w„is read for the third time and passed finally on this the / / 1
day of 0( n‘ kar (. , 19 ! , by the following vote:
Mary Rhodes
Cezar Galindo
Leo Guerrero
Betty Jean Longoria
al
Edward A. Martin
Joe McComb
Dr. David McNichols
Clif Moss
Mary Pat Slavik
PASSED AND APPROVED, this the % day of 4 X11 km ' , 19 q .
MAYOR
THE CITY OF CORPUS CHRISTI
APPROVED: f t, DAY OF (0( , 19g1 :
JAMES R. BRAY,
JR., CITY ATTORNEY
BY Ai Ctsy'o pOalp,/ , Assistant City Attorney
044 0 213 C d
PUBLISHER'S AFFIDAVIT
State of Texas, } CITY OF CORPUS CHRISTI
County of Nueces } ss: Ad #71575
PO #
Before me, the undersigned, a Notary Public, this day personally
came Kerri Lesmeister, who being first duly sworn, according to
law, says that she is a Business Office Secretary of the Corpus
Christi Caller -Times, a daily newspaper published at Corpus
Christi in said County and State, generally circulated in
Aransas, Bee, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim
Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio, San
Patricio, Victoria, and Webb Counties, and that the publication
of NOTICE OF PASSAGE OF ORDINANCE NO. 021306 AMENDING THE CODE
which the annexed is a true copy, was published in the Corpus
Christi Caller -Times on the 23rd day of December 1991.
One Time(s)
$ 22.95
Fyc Ak utJ'vvi V'
Business Office Secretary
Subscribed and sworn to before me this 30th day of
December , 1991
Notary Public, Nueces County, Texas
My commission expires on 4-24-93 .
COY Grub ...,.....
QF PASSAGE SAGE
OF 011pKi .021306 b
AMENDING 'ODE OF
OOILDIAND GAA WELLS, BHAPTER Y b
AMENDING SECTIONS 35-3,
35-16, 35-34, 35-Z5, 35-60,
35-80, 3b:105, 35-107,
35-130, AND 35-133.
The ordinance was paned
and appfuved by the City,
- Council of the City of
Corpus Christi, Texas on the
17th day of December, 1991.
/s/ Amino Chapa
Coy
GIN Secretary the
CS.puraChrieti pu
- NOTICE OF MAI on ram ih.